Many people dream of retiring with $1 million. But in reality, a $1 million nest egg may not go as far as you'd think.

If you follow the 4% rule for managing your nest egg, a $1 million savings balance leaves you with $40,000 in annual income. That's a decent chunk of money, especially when you combine it with Social Security benefits, but you may not be living in luxury.

That's why you may want to aim higher than $1 million for retirement savings purposes. In fact, you may be setting your sights on $5 million in savings.

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Source Fool.com